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No. 2 AOL Exec Quits After 4 Months on Job

June 26, 1996|From Times Wire Services

America Online Inc. said Tuesday that William Razzouk resigned as president and chief operating officer after four months and that Chairman and Chief Executive Steve Case has assumed his responsibilities, effective immediately.

Razzouk, who joined the No. 1 online service in February, said the prospect of relocating his family to the Washington area from Memphis, Tenn., was a significant factor in his decision.

"I leave with only good feelings for the people of America Online, and especially for Steve Case," Razzouk said.

Razzouk came to Vienna, Va.-based AOL from Federal Express Corp., where he was chief operating officer. The move was applauded by Wall Street at the time.

America Online has grown from 800,000 subscribers about two years ago to more than 6 million today.

The resignation comes as some investors and analysts question America Online's growth prospects and the company faces federal investigations and suits over its billing practices. The stock has fallen 40% from its record high of $70 on May 7. On Tuesday, it rose 37.5 cents to close at $42.50 in trading of 4.87 million shares on Nasdaq, making it the ninth-most active stock in U.S. markets.

Some analysts greeted Case's hands-on approach as a serious effort to lead America Online through its trying times. The stock was raised to "strong buy" from "outperform" by analyst Mary Meeker at Morgan Stanley & Co.

Razzouk's departure comes at a time when AOL is under scrutiny by the Federal Trade Commission, which reportedly is looking at AOL's billing practices amid several class-action suits charging AOL with overbilling, insufficient disclosure of connection charges and inaccurate billing in a designated "free area."

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